~ Notes from the pragmatic underground

Retrospective: On growth and stagnation

Whether or not we are reaching the end of the last great burst of innovation, it behooves us to remember that economic growth has through history depended on more than a single factor. Yes, the Romans did invent the arch and concrete, but most of the growth in their world came from widespread use of slaves for labor. I suppose that this was an innovation in itself, of sorts, but arguably the source of growth lay then mostly in trade.

Growth in the Western world began to manifest in the wake of Alexandrian, trade-driven integration. In China, much as it was in Rome, it was vast supplies of labor driving wealth creation. In medieval Europe, too, it was trade that made Genoa and Venice and the northern commercial towns rich.

Industrial revolution allowed for the substitution of energy for labor, thus magnifying, in effect, the available units of work at an affordable cost. We seem to have worked through the available expansion offered by mechanization now — consider how many man-hours go into making our modern gadgets — and returned to human work units as the more cost-efficient alternative. Can we predict the source of the next wave of growth, or indeed, will there be one in our lifetimes? Only time can tell us for certain.